Fat Cats and Sleeping Dogs

Another day and another mortgage adviser is fined by the City regulator for mis-selling home loans. Today's head on a pike is Ian Sanderson. He worked for Mortgage Master, a firm of advisers based near Glasgow, and was found guilty of "deliberately entering false information on mortgage applications". He's been banned from the industry and the firm fined more than £10,000.

That will show him and countless others that the Financial Services Authority is, to steal a well-worn phrase, tough on crime and tough on the causes of crime.Except that duffing up the small-time operators that step out of line is a far easier task than pursuing the big boys.

It will soon be the bank reporting season, a time when our high-street heavyweights tell us how much money they made in the previous six months. All the bosses who recklessly squandered billions of pounds of their customers' money on buying dodgy US sub-prime mortgages are still in place, still earning huge salaries and bonuses.Most will trumpet their achievements at maintaining profits during such turbulent times. They will conveniently sidestep how much money and value they have all lost.More importantly, the former bosses of Northern Rock continue to stomp around the north-east, playing cricket and attending Rotary lunches without anyone in authority feeling their collars.

Adam Applegarth, the former chief executive, cashed in more than £1m worth of shares in January 2007. Six months later his bank was effectively bust. Other board members similarly grew fat on Northern Rock's largesse.

The bank's current chairman, Ron Sandler, has taken it upon himself to examine whether the directors acted in breach of any regulations, rules or guidelines. He is cagey about the scope of his investigation and what he might do (report to the police or FSA) should he find anything wrong.

But why is it left to him to rake over the coals more than a year after most of the decision were taken that crashed the bank. And what about the highly respected bunch of non-executive directors who are still convinced that they performed their duties with due care?

Former senior non-executive Sir Ian Gibson told a Northern Rock shareholders meeting the bank was a huge success despite almost going bust. It was a victim of world events. Could he explain why other banks had survived where his had not? No, he could not. Derek Wanless, the former NatWest banker who sat on Northern Rock's risk committee was similarly reluctant to blame himself and his lack of financial acumen for the bank's demise.

In Newcastle the local population is still hurting from the loss of their bank. Most want to buy the line that it was brought low by global forces and incompetent regulators. Only a few point the finger at the bank's board.

Yet they deserve a clearer explanation from an official body. They also deserve an official investigation of their heroes and their actions. Is it so heroic to take the money in the good times – and we're talking more than £15m over five years in the case of Applegarth, and not pay it back when the bets fail to pay?

The government is proposing new rules on how to prevent another Northern Rock. It is time it also asked itself why nobody senior in the City was ever dragged to the FSA's Canary Wharf tower for a formal interview about how the bank under their management squandered so much money.

If I were Ian Sanderson, I would want to laugh in the face of my FSA accusers. He knows the bigger fish, the people who created a climate in which he ended up generating loans whatever the income of his clients, have all escaped the FSA's net.